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State Street Strategist: Every Portfolio Can Benefit From Gold

State Street Strategist: Every Portfolio Can Benefit From Gold

Gold prices tend to move lower at the early stages of a stock market sell-off, according to one gold expert.

The Expert

George Milling-Stanley, head of State Street Global Advisors' gold strategy.

The Thesis

When faced with the prospect of margin calls, many investors and traders aren't interested in selling their stock positions at depleted levels, Milling-Stanley said during CNBC's "Worldwide Exchange." Investors are instead turning to gold, or "the thing that comes in useful when other things go down," Milling-Stanley said.

Gold "does its job," which implies investors will return to buy it back — so the current weakness in gold and gold-related products like the SPDR Gold Trust (ETF) (NYSE: GLD) is likely to reverse, he said. 

While there never is a "bad time" to be buying gold, now is certainly a "perfect" to be buyers of the commodity, he said. The pressure in gold has been to the upside, which creates an ideal scenario for investors, Milling-Stanley said. 

"Every portfolio would benefit from a small strategic allocation to gold, and I don't think that the particular entry point is necessarily the thing to focus on." 

Some experts are saying there is a relationship between bitcoin and gold, but Milling-Stanley said he isn't seeing any evidence of that. Gold is among the least-volatile instruments, but bitcoin and other cryptocurrencies have proven to be "exponentially bigger," which implies none of the cryptocurrencies are serious competitors to gold, he said. 

Price Action

Shares of the Gold Trust ETF were up 0.29 percent to $125.15 at the time of publication Thursday afternoon. 

Related Links:

Gold Miners Celebrate A Weakening Dollar: 'Inflation Is Coming'

This Gold Mining CEO Thinks Cryptos And Gold Are Both 'Here To Stay'


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